Facebook Has To Waste Money On 750 IBM Patents Just To Ward Off Other Patent Lawsuits

from the play-the-game,-waste-money dept

It's been a pretty open secret for quite some time that Facebook is actively in the market to buy a bunch of patents, and now it's done its first big deal, scoring 750 patents from IBM to add to the 56 patents it currently has (some of which it purchased, and some of which it applied for). There's been plenty of talk about people who don't really know much about patents about how Facebook "needs" more patents, and the ridiculous Yahoo lawsuit only increased the attention the issue is getting. Plus, there are some investors who still -- for whatever reason -- think that the number of patents in a portfolio are a reasonable proxy for innovation or the ability to control a market. Of course, none of these patents will help Facebook against its most common legal foe: the patent troll. They're really only useful either against other operating companies (to ward off patent nuclear war cross-suits) or if Facebook decides to become obnoxious like Yahoo and start suing others offensively.

What this really shows is just how broken the patent system is. Facebook basically just had to waste a large chunk of money on a bunch of patents that have nothing to do with innovation, which won't help Facebook provide a better product for its users and which will only serve to create more money for lawyers somewhere down the road. That's not a healthy system. That's not an efficient system, and it's not one that's good for innovation or economic growth.

Re:

Just one man's view, but to me Facebook is already well down the path of becoming a "legacy" in a relatively short time. So that one understands what I mean by "legacy", I have found over many years of dealing with all sorts of companies, big and small, that an IPO is one of the first steps down that path. "Shareholder ROI" begins the inexorable march from "quick and nimble" to "we have to meet quarterly projections".

Now, whether or not this means FB will start looking at weilding patents as a sword remains to be seen. After all, look at IBM, possible the largest holder of patents in the world. While on rare occasion it has proceeded against other companies using in part patents, their patents generally sit on shelves for possible use in those rare instances.

I can only speak for myself, but I have never advised a company to secure patents just because it has come up with something "nifty". Rather, I have encouraged them to look at their long range plans for introducing in the future new products and services. If the invention is a critical aspect of such products and services, then is would seem to be a good candidate for a patent. Otherwise, it is merely a nice to have, but one that diverts financial resources from other beneficial uses. I have likewise always encouraged them to continually review their patent activities to determine if any activities relate to products and services that have fallen by the wayside and have no relevance to such products and services. If it becomes clear that they are no longer relevant, then either abandon associated activities, or in a very few instances make it available to others as to whom it may be relevant and useful.

In other words, portfolio building should never be the goal. Pertinency to long range business plans should be the relevant criteria, and if that means stopping further activities on the irrelevant then so be it.

By this measure, fire sale purchases of someone else's work embodied in patents is a fool's bet. It is little more than purchasing a "grab bag" with little thought if what is hidden in the bag is even relevant.

Patent Abolition FTW

The patent system needs to be abolished. Where can ordinary people find a politician to vote for, who will not sell out to the patent bar? Is there anybody who is standing on a platform which includes the abolition of the patent system?

Re: Patent Abolition FTW

No, because no matter how badly Mike tries to paint the patent system, the alternatives are pretty much unthinkable. While patents in the area Facebook is working in may seem VERY obvious now, they were almost all generally novel or unique at the time they were applied for.

Re: Re: Re: Patent Abolition FTW

No, I am not suggesting that. Why would you get that impression?

I am saying that, without a patent system, there may be less desire to "push the envelope" into new areas, and rather everyone would be taking the current solution and optimizing the hell out of it. Basically, why do any research or really develop anything, when you can take someone else's work and go from there? What it would do is take the "first to market" advantage and turn it into a cash sink hole - can you imagine a world with 10,000 twitters?

When you remove one of the rewards for moving forward, you remove some of the incentive. You don't remove all of it, but you certainly make it a less desirable option.

Re: Re: Re: Re: Patent Abolition FTW

What exactly is Twitter doing that is so unique? The uniqueness of Twitter is not in the underlying technology but in the community that it created. That community cannot be patented yet it has tremendous value.

Re: Re: Re: Re: Re: Patent Abolition FTW

A system and method for exchanging messages on the internet. Very unique and original. Since it is patented this website should actually be illegal, because look at us exchanging messages on the internet it is just slap in the face to the hardworking twitter coder innovators.

Do you have any idea how much code it took to limit people to 140 characters?

First and foremost, the people doing it must love learning, that is the principal motivation to anyone, second in a world where we can't do everything alone people quickly realize they need others and that is the principle behind sharing knowledge and achievements. Those are the people who create the market because they create something out of passion and others find uses for it and then only them sales come to be.

So no, if you remove the financial incentive to do something you are removing a facilitator for someone who love something to do it, but if there are other ways that can be achieved they will pursue it regardless of the financial outcome.

Further IP law is not an incentive to create something, is an incentive to promote bad behavior and an exclusionary mentality that actually harms the economics of a market.

Re: Re: Re: Re: Patent Abolition FTW

I am saying that, without a patent system, there may be less desire to "push the envelope" into new areas, and rather everyone would be taking the current solution and optimizing the hell out of it.

I think you misunderstand the fundamental purpose of the patent system. There was no lack of "pushing the envelope" before patents were a Thing, and patents don't affect invention in that way at all. Inventors invent for a lot of reasons -- many having nothing directly to do with money -- and the patent system doesn't affect those reasons much.

The reason that the patent system exists is to encourage inventors to actually tell others about their inventions in a way that the others can learn from and build on them. The problem the patent system was trying to solve was that inventors tended to keep everything secret and their knowledge could not be used by society at large. Think da Vinci and his secret codes.

In other words, this statement:

Basically, why do any research or really develop anything, when you can take someone else's work and go from there?

expresses a sentiment that is exactly what the patent system is trying to change. The whole point is to allow you to take someone else's work and go from there.

The current patent system in the US is so broken as to be an abomination, but the rationale for patents makes good sense: information sharing.

Re: Re: Patent Abolition FTW

>No, because no matter how badly Mike tries to paint the
>patent system, the alternatives are pretty much
>unthinkable.

And yet we managed almost throughout the whole of human history without them. The Roman Empire conquered Europe without them. Classical Greece flourished without them. Ancient Egypt dominated its neighbours for 3000 years without them. China survived right through to the 20th century without them.

Re: Re: Patent Abolition FTW

What good is and advancement if it can't be used?
The granting of monopolies by governments is the real harmful point that everybody should know about it.

Those things pool together somewhere and somebody start thinking that they are owned money for doing nothing, knowledge that is not applied is useless knowledge, knowledge that can't be passed down to others is dead knowledge.

One great example of dead knowledge is DaVinci, people guarded his secrets so much that by the time it was rediscovered it no long mattered.

Re: Re: Patent Abolition FTW

One of the purposes of patents was to make the underlying ideas public, rather than trade secrets. The patent system was established in a time when reverse engineering was either unknown or very limited.

In todays world reverse engineering is common and readily available. The innovators could keep their new ideas as trade secrets until they release their product. Then the whole world would reverse engineer it and come up with their version of that product. The original innovators however have lead time, they already have the product (no need for reverse engineering it) and can spend their time and resources listening to the market and improving the product, to stay ahead of the competition. That first to market and lead time for improvement is a much bigger economic incentive than the protectionist 'build it, protect it, sit on it and stop innovating or listening to the market' that the patent system provides today.

Re: Re: Re: Patent Abolition FTW

I am not at all trying to be contrarian, but merely note that based upon my experience your comment 'build it, protect it, sit on it and stop innovating or listening to the market' does not reflect what virtually every company I have dealt with actually does. They do invent it, build it, protect it, listen to the market, and keep improving the product to make it even better. It would be foolish to do otherwise if you plan to stay in business for the long haul.

Re: Re: Re: Re: Patent Abolition FTW

Re: Re: Re: Re: Patent Abolition FTW

How about in the case where patent trolls patent it, don't build it, do sit on it, do protect it, don't listen to the market, don't improve it, and sue the hell out of anyone who comes near it or tries to improve it?

Re: Patent Abolition FTW

Not that I know of, at least not in the Big Two. And what with ballot access laws, big-budget campaigns, and near exclusive media attention, you won't be seeing anyone make it up there who's not a Democrat or Republican.

"the masnick" has spoken.

What this really shows is just how broken the patent system is. Facebook basically just had to waste a large chunk of money on a bunch of patents that have nothing to do with innovation,

Let me guess Masnick, you have read (and understood) all those patents and by some form of "masnick magic" you have deemed ALL OF THEM to have nothing to do with innovation !!!

which won't help Facebook provide a better product for its users again, based on WHAT ???? have you as evidence to show your readers you are not full of shit ?

so facebook has at least 806 patents, that you have studied and with your superior technical abilities (as shown by the quality of Techdirt) you have performed a detailed analysis of all those patents, and provided your sage advise to your equally (un)-educated plebs who you think that if 'the masnick says something, it must have come directly from the work of our mighty Allah !

have you even looked at ONE of the patents ? I guess not, have you ever actually read a patent ?

If so how can you claim you 'know' the patent system ?

what technical, engineering or legal experience do you have to confirm your errant statements ?

If the quality of this web site is an indication of your 'technical skills' then you dont have to bother providing an answer, as that speaks well enough for itself.

You dont have a clue, and what is worse than that, you dont even have a clue that you dont have a clue. I guess you have allready accepted that most people who have bothered to read you know what you are and what you ARE NOT, they (we) are aware you have given up any hope of earning any respect, but as long as you get your Google kickback who cares right !!

Re: "the masnick" has spoken.

Re: "the masnick" has spoken.

Facebook is there without the need of any patents except to prevent its own demise. The patents are being bought defensively and the stupid Yahoo lawsuit shows just how this strategy is needed. Also, Facebook spent money on 750 patents that will... let them keep doing what they already did before them. Innovation at its finest. And the money spent on those patents won't be 1- reinvested into the site and 2-distributed to FB stakeholders.

With ppl like you around it's not surprising a broken system like this is still up. Unfortunately there are those like you that hold political power.

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why did you 'forget' to mention the 503 patents Facebook has filed for ?

Yes, and these patents are absolutely necessary for FB to keep delivering an experience their users seem to like and without them FB wouldn't be able to innovate. Because Facebook relied heavily in their patents when they were just starting right? Otherwise they wouldn't be here, right?

You should really read the article and maybe you'd avoid making a fool of yourself by losing the point entirely.

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He does read the article, but all he cares about is to not only make some kind of nasty rebuttal to any and all of Mike's points (even if he has to go for Creationist logic to do so) but he also has to get some unwarranted personal jibes in as well. Actually addressing the overall point of the article (and especially, coherently) would just be a waste of his time, effort, and 'superior debating skills'.

I want to know what all these Patents are? It's just a web site for crying out loud! I have to pay patents to put up a web site. Fraaaak them loudly. Free Internet huh? Bullshitted again! Free Enterprise!! Hah! Patents are entrepreneur killers. Who in their right mind patents software? Software is fluid and adds and deletes features at the will of the programmer. Do I have to patent my program every time I change it? Time to find a new industry to innovate. If you need a patent to make a web site then the internet is dead!

Depends on the goal

If we are trying to build a global economy based on "Intellectual Property", then perhaps it serves us well to hone our skills at building IP mills that are capable of producing legally valid patents on everything that anyone can possibly do. If that's your view of the world, then I think we could be in the gold rush era of this largely untapped resource. Those who show up first and fight the hardest get to settle the new frontier.

IBM

Actually, that money is flowing to IBM, who *do* do innovation (the kind that actually makes technology move forward, rather than just invent new ways of worming into peoples private lives). This is why I own a shit-ton of IBM stock and no Facebook stock.

Re: IBM

Yes, because nothing Facebook ever thinks about can be used in ways that are useful for ppl in general. It's a very limited and poor way of thinking, just because it's useless for you or it's being employed in a way you don't agree with it doesn't mean it's not important. Originally the internet was a way to keep the military connected even if a node was taken down... Look how many useless things ppl are doing on it now....... Give the money to the military, that's where the innovation comes from.

Mike, true innovation requires R&D. Copying other peoples ideas ISN'T INNOVATION. You still haven't accepted that fact. Do you have even a remote idea of the amount of money that IBM spends on R&D every single year? It really is a staggering number! Do some reasearch before you say all that money was WASTED. Look into all new technology IBM has created over the years and look into what they are researching today. That company has brought so much to the world and continues to push the boundaries. They are far from a patent troll - they are innovators.

Re:

What are you talking about? Who is claiming that IBM is a patent troll? The only patent troll named in this article is Yahoo. There is also a statement warning that with this purchase by Facebook, it could stumble down the hole known as Patent Troll.

R&D does not require patents to be profitable. Facebook was designed and created without patents. Patents were only sought after seeking funding to expand. These patents that Facebook bought are not going to be used to expand what Facebook can do. Most likely they cover things Facebook was doing despite them. What value have they actually brought Facebook?

Re:

Innovation is delivering something new to some market, copied or not.

And yes Facebook WASTED that money that they could be applying to others areas of their business, they are forced to buy patents because of incredible high risks that patents promote in the market that is not promoting progress is promoting fear.

another biased article

They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are patent system saboteurs receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.

“Patent troll”

Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to pay or stop”. This is just dissembling by large infringers and their paid puppets to kill any inventor support system. It is purely about legalizing theft. The fact is, many of the large multinationals who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so.

Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

another biased article

“Patent troll”

Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to pay or stop”. This is just dissembling by large infringers and their paid puppets to kill any inventor support system. It is purely about legalizing theft. The fact is, many of the large multinationals who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so.

Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are patent system saboteurs receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.